NATURAL RESOURCE PARTNERS LP 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID 42 ) 52 Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (PCAOB ID 238) 54 Report of BDO USA, P.C. Independent Registered Public Accounting Firm (PCAOB ID 243) 55 Consolidated Balance Sheets as of December 31, 2024 and 2023 56 Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022 57 Consolidated Statements of Partners ’ Capital for the years ended December 31, 2024, 2023 and 2022 58 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 59 Notes to Consolidated Financial Statements 60 51 Table of Contents Report of Independent Registered Public Accounting Firm To the Partners of Natural Resource Partners L.P. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Natural Resource Partners L.P. (the Partnership) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income , partners’ capital, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, based on our audits and the reports of PricewaterhouseCoopers LLP and BDO USA, P.C., the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We did not audit the financial statements of Sisecam Wyoming LLC (Sisecam Wyoming), a limited liability company in which the Partnership has a 49% interest. In the consolidated financial statements, the Partnership’s investment in Sisecam Wyoming is stated at $257 million and $277 million as of December 31, 2024 and 2023, respectively, and the Partnership’s equity in earnings of Sisecam Wyoming is stated at $18 million in 2024, $73 million in 2023 and $60 million in 2022. Those statements were audited by PricewaterhouseCoopers LLP for the year ended December 31, 2024 and BDO USA, P.C. for the years ended December 31, 2023 and 2022 whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Sisecam Wyoming, is based solely on the reports of PricewaterhouseCoopers LLP and BDO USA, P.C. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits and the report of PricewaterhouseCoopers LLC and the reports of BDO USA P.C. provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. 52 Table of Contents Impairment Assessment of Mineral Rights Description of the Matter At December 31, 2024, the Partnership’s mineral rights, net totaled $380 million. As described in Note 2 to the consolidated financial statements, the Partnership evaluates its long-lived assets (inclusive of mineral rights) for possible impairment whenever events or changes in circumstances indicate that the asset’s net book value may not be recoverable. Management evaluates various qualitative and quantitative factors in determining whether or not events or changes in circumstances indicate that the net book value of an asset may not be recoverable. Potential events or circumstances include, but are not limited to, reduction in economically recoverable tons or production ceasing on a property for an extended period. Auditing the Partnership’s impairment indicator assessment involved our subjective judgment because, in determining whether an impairment indicator occurred, significant uncertainty exists with judgments management utilizes regarding the likelihood of future production and the likelihood of potential contract renewals or modifications, which rely on information reported by the Partnership’s lessee operators. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Partnership’s impairment assessment process. We tested controls over the Partnership’s process for identifying and evaluating potential indicators of impairment pertaining to mineral rights and the related subjective judgments. To test the Partnership’s mineral rights impairment assessment, our audit procedures included, among others, making inquiries of management (including personnel in operations) to understand changes in business, and evaluating the subjective judgments used in the Partnership’s assessment. Specifically, we corroborated reserve information to new reserve studies when available. Additionally, we inspected lease modifications of royalty-based lease contracts. We searched for and evaluated other publicly available information pertaining to certain of their lessees, that corroborates or contradicts management’s assessment. /s/ Ernst & Young LLP We have served as the Partnership’s auditor since 2002. Houston, Texas February 28, 2025 53 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Managers and Members of Sisecam Wyoming LLC Opinion on the Financial Statements We have audited the accompanying balance sheet of Sisecam Wyoming LLC (the “Company”) as of December 31, 2024, and the related statements of operations and comprehensive income, of members' equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of these financial statements in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition – Sales to Others As described in Note 2 to the financial statements, the Company’s sales to others was $578 million for the year ended December 31, 2024. The Company’s revenues are recognized at a point-in-time when control of goods transfers to the customer. The time at which delivery and transfer of title, and therefore control, occurs ranges from the point in time when the product leaves the Company’s facilities to agreed upon delivery points. Agreed upon delivery points at which control of the product transfers includes points where product reaches the port of loading, a vessel, or other agreed location, thereby rendering the performance obligation fulfilled. Management recognizes revenue as the amount of consideration expected to be received in exchange for transferring promised goods to customers. The principal consideration for our determination that performing procedures relating to revenue recognition for sales to others is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition for sales to others. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others, (i) testing revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents such as customer contracts, purchase orders, invoices, proof of shipment or delivery, and subsequent cash receipts; and (ii) confirming a sample of outstanding customer invoice balances as of December 31, 2024 and, for confirmations not returned, obtaining and inspecting source documents, such as customer contracts, purchase orders, invoices, proof of shipment or delivery, and subsequent cash receipts. /s/PricewaterhouseCoopers LLP Charlotte, North Carolina February 28, 2025 We have served as the Company's auditor since 2024. 54 Table of Contents Report of Independent Registered Public Accounting Firm Board of Managers and Members of Sisecam Wyoming LLC Atlanta, Georgia Opinion on the Financial Statements We have audited the accompanying balance sheet of Sisecam Wyoming LLC (the “Company”) as of December 31, 2023, the related statements of operations and comprehensive income, members’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ BDO USA, P.C. We served as the Company's auditor from 2022 to 2024. Charlotte, North Carolina March 7, 2024 55 Table of Contents NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED BALANCE SHEETS December 31, (In thousands, except unit data) 2024 2023 ASSETS Current assets Cash and cash equivalents $ 30,444 $ 11,989 Accounts receivable, net 31,469 41,086 Other current assets, net 1,961 2,218 Total current assets $ 63,874 $ 55,293 Land 24,008 24,008 Mineral rights, net 379,638 394,483 Intangible assets, net 12,924 13,682 Equity in unconsolidated investment 257,355 276,549 Long-term contract receivable, net 23,480 26,321 Other long-term assets, net 11,628 7,540 Total assets $ 772,907 $ 797,876 LIABILITIES AND CAPITAL Current liabilities Accounts payable $ 909 $ 885 Accrued liabilities 12,121 12,987 Accrued interest 302 584 Current portion of deferred revenue 4,341 4,599 Current portion of long-term debt, net 14,192 30,785 Total current liabilities $ 31,865 $ 49,840 Deferred revenue 55,814 38,356 Long-term debt, net 127,876 124,273 Other non-current liabilities 6,244 7,172 Total liabilities $ 221,799 $ 219,641 Commitments and contingencies (see Note 15) Class A Convertible Preferred Units ( 71,666 units issued and outstanding at December 31, 2023 at $ 1,000 par value per unit) (See Note 4) $ — $ 47,181 Partners’ capital Common unitholders’ interest ( 13,049,123 and 12,634,642 units issued and outstanding at December 31, 2024 and 2023, respectively) $ 543,231 $ 503,076 General partner’s interest 9,547 8,005 Warrant holders’ interest — 23,095 Accumulated other comprehensive loss ( 1,670 ) ( 3,122 ) Total partners' capital $ 551,108 $ 531,054 Total liabilities and partners' capital $ 772,907 $ 797,876 The accompanying notes are an integral part of these consolidated financial statements. 56 Table of Contents NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year Ended December 31, (In thousands, except per unit data) 2024 2023 2022 Revenues and other income Royalty and other mineral rights $ 234,149 $ 278,733 $ 307,013 Transportation and processing services 10,878 14,923 21,072 Equity in earnings of Sisecam Wyoming 18,135 73,397 59,795 Gain on asset sales and disposals 4,845 2,956 1,082 Total revenues and other income $ 268,007 $ 370,009 $ 388,962 Operating expenses Operating and maintenance expenses $ 28,036 $ 32,315 $ 34,903 Depreciation, depletion and amortization 15,535 18,489 22,519 General and administrative expenses 25,151 26,111 21,852 Asset impairments 87 556 4,457 Total operating expenses $ 68,809 $ 77,471 $ 83,731 Income from operations $ 199,198 $ 292,538 $ 305,231 Other expenses, net Interest expense, net $ ( 15,554 ) $ ( 14,103 ) $ ( 26,274 ) Loss on extinguishment of debt — — ( 10,465 ) Total other expenses, net $ ( 15,554 ) $ ( 14,103 ) $ ( 36,739 ) Net income $ 183,644 $ 278,435 $ 268,492 Less: income attributable to preferred unitholders ( 4,248 ) ( 16,719 ) ( 30,000 ) Less: redemption of preferred units ( 24,485 ) ( 60,929 ) — Net income attributable to common unitholders and the general partner $ 154,911 $ 200,787 $ 238,492 Net income attributable to common unitholders $ 151,813 $ 196,771 $ 233,722 Net income attributable to the general partner 3,098 4,016 4,770 Net income per common unit (see Note 6) Basic $ 11.69 $ 15.59 $ 18.72 Diluted 11.35 13.08 13.39 Net income $ 183,644 $ 278,435 $ 268,492 Comprehensive income (loss) from unconsolidated investment and other 1,452 ( 21,839 ) 15,506 Comprehensive income $ 185,096 $ 256,596 $ 283,998 The accompanying notes are an integral part of these consolidated financial statements. 57 Table of Contents NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED STATEMENTS OF PARTNERS ’ CAPITAL Accumulated Other Total Common Unitholders General Warrant Comprehensive Partners' (In thousands) Units Amounts Partner Holders Income (Loss) Capital Balance at December 31, 2021 12,351 $ 203,062 $ 1,787 $ 47,964 $ 3,211 $ 256,024 Net income (1) — 263,122 5,370 — — 268,492 Distributions to common unitholders and the general partner — ( 33,697 ) ( 687 ) — — ( 34,384 ) Distributions to preferred unitholders — ( 29,653 ) ( 605 ) — — ( 30,258 ) Issuance of unit-based awards 155 — — — — — Unit-based awards amortization and vesting, net — 1,965 — — — 1,965 Capital contribution — — 112 — — 112 Comprehensive income from unconsolidated investment and other — — — — 15,506 15,506 Balance at December 31, 2022 12,506 $ 404,799 $ 5,977 $ 47,964 $ 18,717 $ 477,457 Net income (2) — 272,866 5,569 — — 278,435 Redemptions of preferred units — ( 59,710 ) ( 1,219 ) — — ( 60,929 ) Distributions to common unitholders and the general partner — ( 68,510 ) ( 1,398 ) — — ( 69,908 ) Distributions to preferred unitholders — ( 21,628 ) ( 441 ) — — ( 22,069 ) Issuance of unit-based awards 129 — — — — — Unit-based awards amortization and vesting, net — 5,854 — — — 5,854 Capital contribution — — 142 — — 142 Warrant settlements — ( 30,595 ) ( 625 ) ( 24,869 ) — ( 56,089 ) Comprehensive loss from unconsolidated investment and other — — — — ( 21,839 ) ( 21,839 ) Balance at December 31, 2023 12,635 $ 503,076 $ 8,005 $ 23,095 $ ( 3,122 ) $ 531,054 Net income (3) — 179,971 3,673 — — 183,644 Redemptions of preferred units — ( 23,995 ) ( 490 ) — — ( 24,485 ) Distributions to common unitholders and the general partner — ( 70,703 ) ( 1,443 ) — — ( 72,146 ) Distributions to preferred unitholders — ( 6,270 ) ( 128 ) — — ( 6,398 ) Issuance of unit-based awards 126 — — — — — Unit-based awards amortization and vesting, net — 2,894 — — — 2,894 Capital contribution — — 782 — — 782 Warrant settlements 288 ( 41,742 ) ( 852 ) ( 23,095 ) — ( 65,689 ) Comprehensive income from unconsolidated investment and other — — — — 1,452 1,452 Balance at December 31, 2024 13,049 $ 543,231 $ 9,547 $ — $ ( 1,670 ) $ 551,108 (1) Net income includes $30.0 million of income attributable to preferred unitholders that accumulated during the period, of which $29.4 million is allocated to the common unitholders and $0.6 million is allocated to the general partner. (2) Net income includes $16.7 million of income attributable to preferred unitholders that accumulated during the period, of which $16.4 million is allocated to the common unitholders and $0.3 million is allocated to the general partner. (3) Net income includes $4.2 million of income attributable to preferred unitholders that accumulated during the period, of which $4.2 million is allocated to the common unitholders and $0.1 million is allocated to the general partner. The accompanying notes are an integral part of these consolidated financial statements. 58 Table of Contents NATURAL RESOURCE PARTNERS L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended December 31, (In thousands) 2024 2023 2022 Cash flows from operating activities Net income $ 183,644 $ 278,435 $ 268,492 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 15,535 18,489 22,519 Distributions from unconsolidated investment 38,781 81,478 44,835 Equity earnings from unconsolidated investment ( 18,135 ) ( 73,397 ) ( 59,795 ) Gain on asset sales and disposals ( 4,845 ) ( 2,956 ) ( 1,082 ) Loss on extinguishment of debt — — 10,465 Asset impairments 87 556 4,457 Bad debt expense 4,185 2,244 1,062 Unit-based compensation expense 11,309 10,910 5,773 Amortization of debt issuance costs and other ( 1,509 ) 1,303 2,410 Change in operating assets and liabilities: Accounts receivable 7,285 ( 164 ) ( 18,671 ) Accounts payable 25 ( 1,108 ) 37 Accrued liabilities ( 2,088 ) ( 225 ) 935 Accrued interest ( 281 ) ( 406 ) ( 224 ) Deferred revenue 17,200 ( 3,483 ) ( 15,424 ) Other items, net ( 2,700 ) ( 698 ) 1,049 Net cash provided by operating activities $ 248,493 $ 310,978 $ 266,838 Cash flows from investing activities Proceeds from asset sales and disposals $ 4,846 $ 2,963 $ 1,083 Return of long-term contract receivable 2,665 2,463 1,723 Capital expenditures — ( 10 ) ( 118 ) Net cash provided by investing activities $ 7,511 $ 5,416 $ 2,688 Cash flows from financing activities Debt borrowings $ 167,850 $ 248,834 $ 70,000 Debt repayments ( 181,028 ) ( 262,396 ) ( 339,396 ) Distributions to common unitholders and the general partner ( 72,146 ) ( 69,908 ) ( 34,384 ) Distributions to preferred unitholders ( 6,398 ) ( 22,069 ) ( 30,258 ) Redemptions of preferred units ( 71,666 ) ( 178,334 ) — Redemption of preferred units paid-in-kind — — ( 19,321 ) Warrant settlements (See Note 4) ( 65,689 ) ( 56,089 ) — Other items, net ( 8,472 ) ( 3,534 ) ( 12,596 ) Net cash used in financing activities $ ( 237,549 ) $ ( 343,496 ) $ ( 365,955 ) Net increase (decrease) in cash and cash equivalents $ 18,455 $ ( 27,102 ) $ ( 96,429 ) Cash and cash equivalents at beginning of period 11,989 39,091 135,520 Cash and cash equivalents at end of period $ 30,444 $ 11,989 $ 39,091 Supplemental cash flow information: Cash paid for interest $ 15,452 $ 13,856 $ 25,265 The accompanying notes are an integral part of these consolidated financial statements. 59 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Nature of Operations Natural Resource Partners L.P. (the "Partnership"), a Delaware limited partnership, was formed in April 2002. The general partner of the Partnership is NRP (GP) LP ("NRP GP" or "general partner"), a Delaware limited partnership, whose general partner is GP Natural Resource Partners LLC ("managing general partner"), a Delaware limited liability company. The Partnership engages principally in the business of owning, managing and leasing a diversified portfolio of mineral properties in the United States, including interests in coal and other natural resources and owns a non-controlling 49 % interest in Sisecam Wyoming LLC ("Sisecam Wyoming"), a trona ore mining and soda ash production business. The Partnership is organized into two operating segments further described in Note 7. Segment Information . As used in these Notes to Consolidated Financial Statements, the terms "NRP," "we," "us" and "our" refer to Natural Resource Partners L.P. and its subsidiaries, unless otherwise stated or indicated by context. The Partnership’s operations are conducted through, and its operating assets are owned by, its subsidiaries. The Partnership owns its subsidiaries through one wholly owned operating company, NRP (Operating) LLC ("Opco"). NRP GP has sole responsibility for conducting the Partnership's business and for managing its operations. Because NRP GP is a limited partnership, its general partner, GP Natural Resource Partners LLC, conducts its business and operations, and the board of directors and officers of GP Natural Resource Partners LLC makes decisions on its behalf. Robertson Coal Management LLC ("RCM"), a limited liability company indirectly owned by Corbin J. Robertson, Jr., owns all of the membership interest in GP Natural Resource Partners LLC. All members of the Board of Directors are appointed by RCM. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements of the Partnership have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The Consolidated Financial Statements include the accounts of Natural Resource Partners L.P. and its wholly owned subsidiaries. The Partnership has an equity investment in Sisecam Wyoming through which it is able to exercise significant influence over but does not control the investee and is not the primary beneficiary of the investee’s activities and is accounted for using the equity method. Intercompany transactions and balances have been eliminated. Reclassifications have been made to prior year amounts in the Consolidated Financial Statements to conform with current year presentation. These reclassifications had no impact on previously reported total assets, total liabilities, partners' capital, net income, or cash flows from operating, investing or financing activities. Use of Estimates Preparation of the accompanying financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the accompanying Consolidated Balance Sheets, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses on the accompanying Consolidated Statements of Comprehensive Income during the reporting period. Actual results could differ from those estimates. The most significant estimates pertain to coal and aggregates mineral rights and related cash flow estimates which are used to compute depreciation, depletion and amortization and impairments of coal and aggregates properties and related intangible assets and commitments and contingencies. Fair Value The Partnership discloses certain assets and liabilities using fair value as defined by authoritative guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 12. Fair Value Measurements for further details. There are three levels of inputs that may be used to measure fair value: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial assets and liabilities whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. 60 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED Cash and Cash Equivalents The Partnership considers all highly liquid short-term investments with an original maturity of three months or less to be cash equivalents. Allowance for Doubtful Accounts The Partnership records an allowance for doubtful accounts for its accounts receivable and notes receivable comprised of estimated credit risk and non-credit risk (e.g., legal disputes) losses. Receivables are written off when collection efforts are exhausted and future recovery is doubtful. The Partnership includes an allowance for current expected credit losses ("CECL") on its financial assets based on the loss-rate method. NRP assesses the likelihood of collection of its receivables utilizing historical loss rates, current market conditions, industry and macroeconomic factors, reasonable and supportable forecasts and facts or circumstances of individual customers and properties. See Note 18. Credit Losses for more information. The total allowance related to accounts receivables included in accounts receivables, net on the Partnership's Consolidated Balance Sheets was $ 4.7 million a nd $ 5.4 million at December 31, 2024 and 2023 , respectively. The total allowance related to short-term notes receivables included in other current assets, net on the Partnership's Consolidated Balance Sheets was $ 0.0 million and $ 0.3 million at December 31, 2024 and 2023 , respectively. The total allowance related to the Partnership's long-term financing receivable included in long-term contract receivable, net on the Consolidated Balance Sheets was $ 0.8 million and $ 0.9 million at December 31, 2024 and 2023 , respectively. The Partnership recorded bad debt expense of $ 4.2 million, $ 2.2 million and $ 1.1 million included in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income for the year ended December 31, 2024, 2023 and 2022 , respectively. Mineral Rights Mineral rights owned and leased are recorded at its original cost of construction or, upon acquisition, at fair value of the assets acquired. Coal and aggregates mineral rights are depleted on a unit-of-production basis by lease, based upon minerals mined in relation to the net cost of the mineral properties and estimated economic tonnage therein. Intangible Assets The Partnership’s intangible assets consist of mineral royalty and transportation contracts that at acquisition were more favorable for the Partnership than prevailing market rates, known as above-market contracts. The estimated fair value of the above-market rate contracts are determined based on the present value of future cash flow projections related to the underlying assets acquired. Intangible assets are amortized on a unit-of-production basis by asset based upon minerals mined or transported in relation to the net book value of the intangible asset and estimated economic tonnage expected to be mined or transported during the above-market contract term. Asset Impairment The Partnership has developed procedures to evaluate its long-lived assets, including intangible assets, for possible impairment periodically or whenever events or changes in circumstances indicate an asset's net book value may not be recoverable. Potential events or circumstances include, but are not limited to, specific events such as a reduction in economically recoverable tons or production ceasing on a property for an extended period. This analysis is based on historic, current and future performance and considers both quantitative and qualitative information. A long-lived asset is deemed impaired when the future expected undiscounted cash flows from its use and disposition is less than the asset's net book value. Impairment is measured based on the estimated fair value, which is usually determined based upon the present value of the projected future cash flows compared to the asset's net book value. The Partnership believes its estimates of cash flows and discount rates are consistent with those of principal market participants. The Partnership evaluates its equity investment for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such investment may have experienced an other-than-temporary decline in value. When evidence of loss in value has occurred, management compares the estimated fair value of the investment to the carrying value of the investment to determine whether potential impairment has occurred. If the estimated fair value is less than the carrying value and management considers the decline in value to be other than temporary, the excess of the carrying value over the estimated fair value is recognized in the financial statements as an impairment loss. The fair value of the impaired investment is based on quoted market prices (Level 1 ), or upon the present value of expected cash flows using discount rates believed to be consistent with those used by principal market participants (Level 3 ), plus market analysis of comparable assets owned by the investee, if appropriate (Level 3 ). Accrued Liabilities Included in accrued liabilities on the Partnership's Consolidated Balance Sheets at December 31, 2024 were $ 8.9 million of accrued employee costs and $ 3.2 million of accrued property taxes. These amounts were $ 10.3 million and $ 2.7 million of accrued employee costs and accrued property taxes, respectively, at December 31, 2023 . 61 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED Revenue Recognition Mineral Rights Segment Revenues Royalty-based leases. Approximately two -thirds of the Partnership's royalty-based leases have initial terms of five to 40 years, with substantially all lessees having the option to extend the lease for additional terms. For these types of leases, the lessees generally make payments to NRP based on the greater of a percentage of the gross sales price or a fixed price per ton of mineral mined and sold. Most of NRP’s coal and aggregates royalty leases require the lessee to pay quarterly or annual minimum amounts, either made in advance or arrears, which are generally recoupable through actual royalty production over certain time periods that generally range from three to five years. The Partnership has defined its coal and aggregates royalty lease performance obligation as providing the lessee the right to mine and sell its coal or aggregates over the lease term. NRP then evaluated the likelihood that consideration it expected to receive from its lessees resulting from production would exceed consideration expected to be received from minimum payments over the lease term. As a result of this evaluation, revenue recognition from the Partnership's royalty-based leases is based on either production or minimum payments as follows: • Production Leases : Leases for which the Partnership expects that consideration from production will be greater than consideration from minimums over the lease term. Revenue for these leases is recognized over time based on production as royalty revenues, as applicable. Deferred revenue from minimums is recognized as royalty revenues when recoupment occurs or as production lease minimum revenues when the recoupment period expires. In addition, NRP recognizes breakage revenue from minimums when NRP determines that recoupment is remote. This breakage revenue is included in production lease minimum revenues. • Minimum Leases : Leases for which the Partnership expects that consideration from minimums will be greater than consideration from production over the lease term. Revenue for these leases is recognized straight-line over the lease term based on the minimum consideration amount as minimum lease straight-line revenues. This evaluation is performed at the inception of the lease and only reassessed upon modification or renewal of the lease. Oil and gas related revenues consist of revenues from royalties and overriding royalties and are recognized on the basis of volume of hydrocarbons sold by lessees and the corresponding revenues from those sales. Also, included within oil and gas royalty revenues are lease bonus payments, which are generally paid upon the execution of a lease. The Partnership also has overriding royalty revenue interests in certain coal and aggregates mineral rights. Revenue from these interests is recognized over time based on when the coal is sold. Carbon neutral revenues. Revenues related to consideration for carbon neutral activities that are recognized at a point in time upon satisfaction of NRP's performance obligation. Wheelage revenues. Revenues related to fees collected per ton to transport foreign coal across property owned by the Partnership that is recognized over time as transportation across the property occurs. Other revenues. Other revenues consist primarily of rental payments and surface damage fees related to certain land owned by the Partnership and are recognized straight-line over time as it is earned. Other revenues also include property tax revenues. The majority of property taxes paid on the Partnership's properties are reimbursable by the lessee and are recognized on a gross basis over time which reflects the reimbursement of property taxes by the lessee. Property taxes paid by NRP are included in operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income. Transportation and processing services revenues. The Partnership owns transportation and processing infrastructure that is leased to third parties for throughput fees. Revenue is recognized over time based on the coal tons transported over the beltlines or processed through the facilities. Contract Modifications Contract modifications that impact goods or services or the transaction price are evaluated in accordance with Accounting Standards Codification 606. A majority of the Partnership's contract modifications pertain to its coal and aggregates royalty contracts and include, but are not limited to, extending the lease term, changes to royalty rates, floor prices or minimum consideration, assignment of the contract or forfeiture of recoupment rights. Consideration received in conjunction with a modification of an ongoing lease will be deferred and recognized straight-line over the remaining term of the contract. Consideration received to assign a lease to another party and related forfeited minimums will be recognized immediately upon the termination of the contract. Fees from contract modifications are recognized in lease amendment revenues within royalty and other mineral rights revenues on the Consolidated Statements of Comprehensive Income while modifications in royalty rates and minimums will be recognized prospectively in accordance with the above lease classification. Contract Assets and Liabilities from Contracts with Customers Contract assets include receivables from contracts with customers and are recorded when the right to consideration becomes unconditional. Receivables are recognized when the minimums are contractually owed, production occurs or minimums are accrued for based on the passage of time. Contract liabilities represent minimum consideration received, contractually owed or earned based on the passage of time. The current portion of deferred revenue relates to deferred revenue on minimum leases and lease amendment fees that are to be recognized as revenue on a straight-line basis over the next twelve months. The long-term portion of deferred revenue relates to deferred revenue on production leases and lease amendment fees that are to be recognized as revenue on a straight-line basis beyond the next twelve months. Due to uncertainty in the amount of deferred revenue that will be recouped and recognized as coal royalty revenues from its production leases over the next twelve months, the Partnership is unable to estimate the current portion of deferred revenue. 62 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED Equity in Earnings of Sisecam Wyoming The Partnership accounts for non-marketable equity investments using the equity method of accounting if the investment gives it the ability to exercise significant influence over, but not control of, an investee. The Partnership's 49 % investment in Sisecam Wyoming is accounted for using this method. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the proportionate share of earnings or losses and distributions. The basis difference between the investment and the proportional share of investee's net assets is attributed to net tangible assets and is amortized over its estimated useful life. The carrying value in Sisecam Wyoming is recognized in equity in unconsolidated investment on the Partnership's Consolidated Balance Sheets. The Partnership's adjusted share of the earnings or losses of Sisecam Wyoming and amortization of the basis difference is recognized in equity in earnings of Sisecam Wyoming on the Consolidated Statements of Comprehensive Income. The Partnership decreases its investment for its proportional share of distributions received from Sisecam Wyoming. These cash flows are reported utilizing the cumulative earnings approach. Under this approach, distributions received are considered returns on investment and classified as operating cash inflows unless the cumulative distributions received exceed the Partnership's cumulative equity in earnings. The excess of cumulative distributions received over the Partnership's cumulative equity in earnings are considered returns of investment and classified as investing cash inflows. Property Taxes The Partnership is responsible for paying property taxes on the properties it owns. Typically, the lessees are contractually responsible for reimbursing the Partnership for property taxes on the leased properties. The payment of and reimbursement of property taxes is included in operating and maintenance expenses and in royalty and other mineral rights revenues, respectively, on the Consolidated Statements of Comprehensive Income. Unit-Based Compensation The Partnership has awarded unit-based compensation in the form of equity-based awards and phantom units. The Partnership's service and performance-based awards are valued using the closing price of NRP's units as of the grant date while the Partnership's market-based awards are valued using a Monte Carlo simulation. Compensation cost is remeasured each reporting period for liability-classified awards based on the fair value of an award and is recognized over the service period, which is generally the vesting period. Forfeitures are recognized as they occur. Unit-based compensation expense for all awards is recognized in general and administrative expenses and operating and maintenance expenses on the Consolidated Statements of Comprehensive Income. See Note 16. Unit-Based Compensation for more information. Deferred Financing Costs Deferred financing costs consist of legal and other costs related to the issuance of the Partnership’s debt. These costs are amortized over the term of the respective line-of-credit or debt arrangements. Deferred financing costs related to the Partnership's revolving credit facility are included in other long-term assets, net on the Partnership's Consolidated Balance Sheets. Deferred financing costs related to the Partnership's note agreements are included as a direct deduction from the carrying amount of the debt liability in current portion of long-term debt, net or long-term debt, net on the Partnership's Consolidated Balance Sheets. Income Taxes The Partnership is not subject to federal or material state income taxes as the unitholders are taxed individually on their allocable share of taxable income. Net income for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities. In the event of an examination of the Partnership’s tax return, the tax liability of the unitholders could be changed if an adjustment in the Partnership’s income is ultimately sustained by the taxing authorities. Recently Adopted Accounting Standard In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023 - 07—Segment Reporting (Topic 280 )—Improvements to Reportable Segment Disclosures ("ASU 2023 - 07" ). The amendments in ASU 2023 - 07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses. The adoption of ASU 2023 - 07 with NRP's 2024 Form 10 -K did not have a material impact on the Partnership's Consolidated Financial Statements. See Note 7. S egment Information for more information. Recently Issued Accounting Standard In November 2024, the FASB issued ASU 2024 - 03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures ("ASU 2024 - 03" ). ASU 2024 - 03 is intended to improve disclosures about a public business entity's expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The guidance is effective for annual periods beginning after December 15, 2026 and quarterly periods beginning after December 31, 2027 and can be adopted prospectively to financial statements issued for reporting periods after the effective date or retrospectively to all prior periods presented in the financial statements. NRP is currently evaluating the potential impact of this guidance on its Consolidated Financial Statements. 63 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 3. Revenues from Contracts with Customers The following table represents the Partnership's Mineral Rights segment revenues from contracts with customers by major source: For the Year Ended December 31, (In thousands) 2024 2023 2022 Coal royalty revenues $ 159,033 $ 218,011 $ 226,956 Production lease minimum revenues 4,365 3,322 5,854 Minimum lease straight-line revenues 16,530 19,389 18,792 Carbon neutral revenues (1) 15,703 2,969 8,600 Property tax revenues 7,100 6,219 5,878 Wheelage revenues 9,324 12,191 13,961 Coal overriding royalty revenues 2,358 2,175 3,434 Lease amendment revenues 3,724 3,070 3,201 Aggregates royalty revenues 2,904 2,876 3,299 Oil and gas royalty revenues 8,566 7,387 16,161 Other revenues 2,744 1,124 877 Royalty and other mineral rights revenues $ 232,351 $ 278,733 $ 307,013 Transportation and processing services revenues 8,597 12,411 17,876 Total Mineral Rights segment revenues from contracts with customers $ 240,948 $ 291,144 $ 324,889 ( 1 ) During 2024, NRP recorded revenues of approximately $ 13.4 million from a third party related to its creation of California Air Resources Board carbon offset credits from our properties. $ 11.3 million of this revenue was recorded in the three months ended December 31, 2024. The following table details the Partnership's Mineral Rights segment contract assets and liabilities resulting from contracts with customers: December 31, (In thousands) 2024 2023 Receivables Accounts receivable, net $ 27,358 $ 37,206 Other current assets, net (1) — 429 Other long-term assets, net (2) 2,352 — Contract liabilities Accounts payable (3) $ 125 $ — Current portion of deferred revenue 4,341 4,599 Deferred revenue 55,814 38,356 ( 1 ) Other current assets, net includes short-term notes receivables from contracts with customers. ( 2 ) Other long-term assets, net includes amounts prepaid by NRP related to override agreements from contracts with customers as well as other long-term assets due from contracts with customers. ( 3 ) Accounts payable includes override payments owed by NRP from contracts with customers. The following table shows the activity related to the Partnership's Mineral Rights segment deferred revenue resulting from contracts with customers: For the Year Ended December 31, (In thousands) 2024 2023 2022 Balance at beginning of period (current and non-current) $ 42,955 $ 46,437 $ 61,862 Increase due to minimums and lease amendment fees 32,960 17,526 19,073 Recognition of previously deferred revenue ( 15,760 ) ( 21,008 ) ( 34,498 ) Balance at end of period (current and non-current) $ 60,155 $ 42,955 $ 46,437 The Partnership's non-cancelable annual minimum payments due under the lease terms of its coal and aggregates royalty contracts with customers are as follows as of December 31, 2024 (in thousands): Lease Term (1) Weighted Average Remaining Years Annual Minimum Payments 0 - 5 years 2.3 $ 13,478 5 - 10 years 5.4 17,477 10+ years 11.2 26,309 Total 7.3 $ 57,264 ( 1 ) Lease term does not include renewal periods. 64 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 4. Class A Convertible Preferred Units and Warrants On March 2, 2017, NRP issued $ 250 million of Class A Convertible Preferred Units representing limited partner interests in NRP (the "preferred units") to certain entities controlled by funds affiliated with The Blackstone Group Inc. (collectively referred to as "Blackstone") and certain affiliates of GoldenTree Asset Management LP (collectively referred to as "GoldenTree") (together the "preferred purchasers") pursuant to a Preferred Unit and Warrant Purchase Agreement. NRP issued 250,000 preferred units to the preferred purchasers at a price of $ 1,000 per preferred unit (the "per unit purchase price"), less a 2.5 % structuring and origination fee. The preferred units entitled the preferred purchasers to receive cumulative distributions at a rate of 12 % of the purchase price per year, up to one half of which NRP may have paid in additional preferred units (such additional preferred units, the "PIK units"). The preferred units had a perpetual term, unless converted or redeemed. However, in 2024 all remaining preferred units were redeemed and none of the Partnership's preferred units remain outstanding. NRP also issued two tranches of warrants (the "warrants") to purchase common units to the preferred purchasers (warrants to purchase 1.75 million common units with a strike price of $ 22.81 and warrants to purchase 2.25 million common units with a strike price of $ 34.00 ). The warrants were exercisable by the holders thereof at any time before the eighth anniversary of the closing date. Upon exercise of the warrants, NRP may have, at its option, elected to settle the warrants in common units or cash, each on a net basis. However, in 2024 all remaining warrants were settled and none of the Partnership's warrants remain outstanding. Accounting for the Preferred Units and Warrants Classification The preferred units were accounted for as temporary equity on NRP's Consolidated Balance Sheets due to certain contingent redemption rights that may have been exercised at the election of preferred purchasers. The warrants were accounted for as equity on NRP's Consolidated Balance Sheets. Initial Measurement The net transaction price was allocated to the preferred units and warrants based on their relative fair values at inception date. NRP allocated the transaction issuance costs to the preferred units and warrants primarily on a pro-rata basis based on their relative inception date allocated values. Subsequent Measurement Preferred Units During the year ended December 31, 2024, the Partnership redeemed a total of 71,666 preferred units for $ 71.7 million in cash. During the year ended December 31, 2023, the Partnership redeemed a total of 178,334 preferred unit for $ 178.3 million in cash. Of the originally issued 250,000 preferred units, no preferred units remained outstanding as of December 31, 2024 . and 71,666 preferred units remained outstanding as of December 31, 2023. The preferred units had a $ 47.2 million carrying value included in class A convertible preferred units on the Partnership's Consolidated Balance Sheets at December 31, 2023. Activity related to the preferred units is as follows: Units Financial (In thousands, except unit data) Outstanding Position Balance at December 31, 2021 269,321 $ 183,908 Redemption of preferred units paid-in-kind ( 19,321 ) ( 19,321 ) Balance at December 31, 2022 250,000 $ 164,587 Redemption of preferred units ( 178,334 ) ( 117,406 ) Balance at December 31, 2023 71,666 $ 47,181 Redemption of preferred units ( 71,666 ) ( 47,181 ) Balance at December 31, 2024 — $ — 65 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED Warrants During the year ended December 31, 2024, the Partnership settled a total of 1,540,000 warrants to purchase common units with a strike price of $ 34.00 . On January 29, 2024 ( the "January 2024 exercise date"), holders of the Partnership's warrants exercised 462,165 warrants at a strike price of $ 34.00 . The Partnership settled the warrants on a net basis with $ 10.0 million in cash and 198,767 common units. The 15 -day VWAP ending on the business day prior to the January 2024 exercise date was $ 97.62 . On February 7, 2024 (the "February 7, 2024 exercise date"), holders of the Partnership's warrants exercised 128,750 warrants at a strike price of $ 34.00 . The Partnership settled the warrants on a net basis with $ 8.0 million in cash. The 15 -day VWAP ending on the business day prior to the February 7, 2024 exercise date was $ 96.29 . On February 8, 2024 ( the "February 8, 2024 exercise date"), holders of the Partnership's warrants exercised 128,750 warrants at a strike price of $ 34.00 . The 15 -day VWAP ending on the business day prior to the February 8, 2024 exercise date was $ 95.63 . The Partnership settled these warrants on a net basis with $ 7.9 million in cash. On February 14, 2024 (the "February 14, 2024 exercise date"), holders of the Partnership's warrants exercised 500,000 warrants at a strike price of $ 34.00 . The 15 -day VWAP ending on the business day prior to the February 14, 2024 exercise date was $ 93.47 . The Partnership settled these warrants on a net basis with $ 29.7 million in cash. In April 2024 ( the "April 2024 exercise date"), holders of the Partnership's warrants exercised 320,335 warrants at a strike price of $ 34.00 . The Partnership settled the warrants on a net basis with $ 10.0 million in cash and 89,059 common units. The 15 -day VWAP ending on the business day prior to the April 2024 exercise date was $ 90.33 . In 2023, the Partnership negotiated transactions with holders of the Partnership's warrants pursuant to which the Partnership repurchased and retired an aggregate of 752,500 warrants with a strike price of $ 22.81 and 710,000 warrants with a strike price of $ 34.00 for approximately $ 56.1 million in cash. As of December 31, 2024 , zero warrants remained outstanding. Of the originally issued 4,000,000 warrants, no warrants remain outstanding as of December 31, 2024 and 1,540,000 warrants to purchase common units with a strike price of $ 34.00 were outstanding as of December 31, 2023. These warrants had a carrying value of $ 23.1 million included in warrant holders' interest within partners' capital on the Partnership's Consolidated Balance Sheets at December 31, 2023. Activity related to the warrants is as follows: Warrants Financial (In thousands, except warrant data) Outstanding Position Balance at December 31, 2021 and 2022 3,002,500 $ 47,964 Warrant settlement ( 1,462,500 ) ( 24,869 ) Balance at December 31, 2023 1,540,000 $ 23,095 Warrant settlements ( 1,540,000 ) ( 23,095 ) Balance at December 31, 2024 — $ — Embedded Features Certain embedded features within the preferred unit and warrant purchase agreement were accounted for at fair value and were remeasured each quarter. See Note 12. Fair Value Measurements for further information regarding valuation of these embedded derivatives. 66 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 5. Common and Preferred Unit Distributions The Partnership makes cash distributions to common unitholders and made cash distributions to preferred unitholders on a quarterly basis, subject to approval by the Board of Directors. NRP recognizes both common unit and preferred unit distributions on the date the distribution is declared. Distributions made on the common units and the general partner's general partner ("GP") interest are made on a pro-rata basis in accordance with their relative percentage interests in the Partnership. The general partner is entitled to receive 2 % of such distributions. Income available to common unitholders and the general partner is reduced by preferred unit distributions that accumulated during the period. NRP reduced net income available to common unitholders and the general partner by $ 4.2 million, $ 16.7 million and $ 30.0 million during the year ended December 31, 2024, 2023 and 2022 , respectively, as a result of accumulated preferred unit distributions earned during the period. Income available to common unitholders and the general partner is also reduced by the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units. As such, NRP reduced net income available to common unitholders and the general partner by $ 24.5 million and $ 60.9 million during the year ended December 31, 2024 and 2023, respectively. The following table shows the cash distributions declared and paid to common and preferred unitholders during the year ended December 31, 2024, 2023 and 2022 , respectively: Common Units Preferred Units Total Total Distribution Distribution (1) Distribution Distribution Month Paid Period Covered by Distribution per Unit (In thousands) per Unit (In thousands) 2024 February October 1 - December 31, 2023 $ 0.75 $ 9,918 $ 30.00 $ 2,150 March (2) Special Distribution 2.44 32,268 — — May January 1 - March 31, 2024 0.75 9,987 30.00 2,150 May (3) April 1 - May 8, 2024 — — 12.33 493 August April 1 - June 30, 2024 0.75 9,986 30.00 950 September (4) July 1 - September 3, 2024 — — 20.68 655 November July 1 - September 30, 2024 0.75 9,987 — — 2023 February October 1 - December 31, 2022 $ 0.75 $ 9,571 $ 30.00 $ 7,500 February (5) January 1 - February 8, 2023 — — 12.33 586 March (6) Special Distribution 2.43 31,329 — — May January 1 - March 31, 2023 0.75 9,669 30.00 6,075 May (7) April 1 - May 5, 2023 — — 11.33 406 June (8) April 1 - June 2, 2023 — — 20.33 915 August April 1 - June 30, 2023 0.75 9,669 30.00 3,650 August (9) June 30 - August 8, 2023 — — 12.33 432 September (10) June 30 - September 12, 2023 — — 23.67 355 November July 1 - September 30, 2023 0.75 9,670 30.00 2,150 2022 February October 1 - December 31, 2021 $ 0.45 $ 5,672 $ 30.00 $ 7,500 February (11) January 1 - February 8, 2022 — — 13.35 258 May January 1 - March 31, 2022 0.75 9,570 30.00 7,500 August April 1 - June 30, 2022 0.75 9,571 30.00 7,500 November July 1 - September 30, 2022 0.75 9,571 30.00 7,500 ( 1 ) Totals include the amount paid to NRP's general partner in accordance with the general partner's 2% general partner interest. ( 2 ) Special distribution was made to help cover unitholder tax liabilities associated with owning NRP common units during 2023. ( 3 ) Relates to accrued distribution paid upon the redemption of 40,000 preferred units in May 2024 ( 4 ) Relates to accrued distribution paid upon the redemption of 31,666 preferred units in September 2024. ( 5 ) Relates to accrued distribution paid upon the redemption of 47,499 preferred units in February 2023. ( 6 ) Special distribution was made to help cover unitholder tax liabilities associated with owning NRP's common units during 2022. ( 7 ) Relates to accrued distribution paid upon the redemption of 35,834 preferred units in May 2023. ( 8 ) Relates to accrued distribution paid upon the redemption of 45,000 preferred units in June 2023. ( 9 ) Relates to accrued distribution paid upon the redemption of 35,000 preferred units in August 2023. ( 10 ) Relates to accrued distribution paid upon the redemption of 15,001 preferred units in September 2023. ( 11 ) Relates to accrued distribution paid upon the redemption of 19,321 preferred units paid-in-kind in February 2022. 67 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 6. Net Income Per Common Unit Basic net income per common unit is computed by dividing net income, after considering income attributable to preferred unitholders, the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred units, and the general partner’s general partner interest, by the weighted average number of common units outstanding. Diluted net income per common unit includes the effect of NRP's preferred units, warrants, and unvested unit-based awards if the inclusion of these items is dilutive. The dilutive effect of the preferred units is calculated using the if-converted method. Under the if-converted method, the preferred units are assumed to be converted at the beginning of the period, and the resulting common units are included in the denominator of the diluted net income per unit calculation for the period being presented. Distributions declared in the period and undeclared distributions on the preferred units that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The calculation of diluted net income per common unit for the year ended December 31, 2024, 2023 and 2022 includes the assumed conversion of the preferred units that remained outstanding during the respective period. The calculation of diluted net income per common unit for the year ended December 31, 2024 and 2023 does not include the assumed conversion of preferred units that were redeemed during the period, as the inclusion of these units would be anti-dilutive. The dilutive effect of the warrants is calculated using the treasury stock method, which assumes that the proceeds from the exercise of these instruments are used to purchase common units at the average market price for the period. The calculation of diluted net income per common unit for the year ended December 31, 2024, 2023 and 2022 includes the net settlement of the warrants for the period during which they were outstanding. The following table reconciles the numerators and denominators of the basic and diluted net income per common unit computations and calculates basic and diluted net income per common unit: For the Year Ended December 31, (In thousands, except per unit data) 2024 2023 2022 Basic net income per common unit Net income attributable to common unitholders $ 151,813 $ 196,771 $ 233,722 Weighted average common units—basic 12,991 12,619 12,484 Basic net income per common unit $ 11.69 $ 15.59 $ 18.72 Diluted net income per common unit Weighted average common units—basic 12,991 12,619 12,484 Plus: dilutive effect of preferred units 281 2,059 6,176 Plus: dilutive effect of warrants 139 1,202 783 Plus: dilutive effect of unvested unit-based awards 236 216 210 Weighted average common units—diluted 13,647 16,096 19,653 Net income $ 183,644 $ 278,435 $ 268,492 Less: income attributable to preferred unitholders ( 1,148 ) ( 2,694 ) — Less: redemption of preferred units ( 24,485 ) ( 60,929 ) — Diluted net income attributable to common unitholders and the general partner $ 158,011 $ 214,812 $ 268,492 Less: diluted net income attributable to the general partner ( 3,160 ) ( 4,296 ) ( 5,370 ) Diluted net income attributable to common unitholders $ 154,851 $ 210,516 $ 263,122 Diluted net income per common unit $ 11.35 $ 13.08 $ 13.39 68 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 7. Segment Information The Partnership's segments are strategic business units that offer distinct products and services to different customers in different geographies within the U.S. and that are managed accordingly. NRP has the following two operating segments: Mineral Rights —consists of mineral interests and other subsurface rights across the United States. NRP's ownership provides critical inputs for the manufacturing of steel, electricity and basic building materials, as well as opportunities for carbon sequestration and renewable energy. The Partnership is working to strategically redefine its business as a key player in the transitional energy economy in the years to come. Soda Ash —consists of the Partnership's 49 % non-controlling equity interest in Sisecam Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin of Wyoming. Sisecam Wyoming mines trona and processes it into soda ash that is sold both domestically and internationally into the glass and chemicals industries. Direct segment costs and certain other costs incurred at the corporate level that are identifiable and that benefit the Partnership's segments are allocated to the operating segments accordingly. These allocated costs generally include salaries and benefits, insurance, property taxes, legal, royalty, information technology and shared facilities services and are included in operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income. Corporate and Financing includes functional corporate departments that do not earn revenues. Costs incurred by these departments include interest and financing, corporate headquarters and overhead, centralized treasury, legal and accounting and other corporate-level activity not specifically allocated to a segment and are included in general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income. NRP’s Chief Operating Decision Makers (“CODM”) are its Chief Executive Officer and President and Chief Operating Officer. Together, they evaluate the Partnership’s performance monthly through a review of the segments’ net income and free cash flow as compared to budget and utilize this information to assess the segments’ performance and allocate resources. NRP does not conduct operations on any of its assets or directly engage in any type of industrial activity. Instead, it leases its mineral and other rights to companies that conduct operations on its properties in exchange for paying royalties and other fees to the Partnership. Operating expenses, capital costs and other liabilities arising out of production activities are borne entirely by NRP's lessees. In the case of its soda ash investment, operations are managed by NRP's partner, Sisecam Chemicals Wyoming LLC. As such, none of the Partnership's expenses are considered to affect the trends reflected in the segments or consolidated information nor are they considered important to NRP’s future profitability. Accordingly, NRP has determined its significant segment expenses to be its employee related expenses, including compensation (salaries, benefits and bonus) and long-term incentive compensation as well as interest expense and property tax expense. The Partnership is responsible for paying property taxes on the properties it owns. Typically, NRP's lessees are contractually responsible for reimbursing the Partnership for property taxes on the leased properties and this reimbursement amount is included within the Mineral Rights segment revenues. Reclassifications have been made to prior year amounts to conform with current year presentation. 69 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED The following table summarizes certain financial information for each of the Partnership's business segments: Operating Segments (In thousands) Mineral Rights Soda Ash Corporate and Financing Total For the Year Ended December 31, 2024 Revenues $ 245,027 $ — $ — $ 245,027 Equity in earnings of Sisecam Wyoming — 18,135 — 18,135 Gain on asset sales and disposals 4,845 — — 4,845 Total revenues and other income $ 249,872 $ 18,135 $ — $ 268,007 Less: — Compensation (salaries, benefits and bonus) $ 7,948 $ — $ 8,570 $ 16,518 Long-term incentive compensation (1) 1,785 — 9,466 11,251 Property taxes 7,704 — — 7,704 Depreciation, depletion and amortization 15,517 — 18 15,535 Asset impairments 87 — — 87 Interest expense, net (2) — — 15,554 15,554 Other segment items (3) 10,428 171 7,115 17,714 Net income (loss) $ 206,403 $ 17,964 $ ( 40,723 ) $ 183,644 As of December 31, 2024 Total assets $ 509,127 $ 257,355 $ 6,425 $ 772,907 For the Year Ended December 31, 2023 Revenues $ 293,656 $ — $ — $ 293,656 Equity in earnings of Sisecam Wyoming — 73,397 — 73,397 Gain on asset sales and disposals 2,956 — — 2,956 Total revenues and other income $ 296,612 $ 73,397 $ — $ 370,009 Less: Compensation (salaries, benefits and bonus) $ 8,382 $ — $ 10,204 $ 18,586 Long-term incentive compensation (4) 2,022 — 8,711 10,733 Property taxes 6,758 — — 6,758 Depreciation, depletion and amortization 18,471 — 18 18,489 Asset impairments 556 — — 556 Interest expense, net (2) — — 14,103 14,103 Other segment items (3) 14,896 257 7,196 22,349 Net income (loss) $ 245,527 $ 73,140 $ ( 40,232 ) $ 278,435 As of December 31, 2023 Total assets $ 516,844 $ 276,549 $ 4,483 $ 797,876 For the Year Ended December 31, 2022 Revenues $ 328,085 $ — $ — $ 328,085 Equity in earnings of Sisecam Wyoming — 59,795 — 59,795 Gain on asset sales and disposals 1,082 — — 1,082 Total revenues and other income $ 329,167 $ 59,795 $ — $ 388,962 Less: Compensation (salaries, benefits and bonus) $ 8,206 $ — $ 9,388 $ 17,594 Long-term incentive compensation (5) 1,259 — 4,505 5,764 Property taxes 6,389 — — 6,389 Depreciation, depletion and amortization 22,519 — — 22,519 Asset impairments 4,457 — — 4,457 Interest expense, net (2) — — 26,274 26,274 Loss on extinguishment of debt — — 10,465 10,465 Other segment items (3) 18,889 160 7,959 27,008 Net income (loss) $ 267,448 $ 59,635 $ ( 58,591 ) $ 268,492 ( 1 ) Long-term incentive compensation for the year ended December 31, 2024 includes ( 1 ) Mineral Rights segment: $ 1.4 million of equity compensation and $ 0.4 million of cash compensation; ( 2 ) Corporate & Financing segment: $ 9.1 million of equity compensation and $ 0.4 of cash compensation ( 2 ) Included in interest expense, net was $ 0.7 million, $ 0.3 million and $ 0.3 million of interest income for the years ended December 31, 2024, 2023 and 2022, respectively. ( 3 ) Other segment items in the Mineral Rights segment primarily include: insurance, legal, overriding royalty expense, processing and transportation expense, information technology, shared facility services, rent and professional fees. Other segment items in the Soda Ash segment primarily include professional fees. Other segment items in the Corporate and Financing segment primarily include: insurance, legal, information technology, shared facility services, rent and professional fees. ( 4 ) Long-term incentive compensation for the year ended December 31, 2023 includes ( 1 ) Mineral Rights segment: $ 1.4 million of equity compensation and $ 0.6 million of cash compensation; ( 2 ) Corporate & Financing segment: $ 8.4 million of equity compensation and $ 0.3 million of cash compensation ( 5 ) Long-term incentive compensation for the year ended December 31, 2022 includes ( 1 ) Mineral Rights segment: $ 0.8 million of equity compensation and $ 0.5 million of cash compensation; ( 2 ) Corporate & Financing segment: $ 4.1 million of equity compensation and $ 0.3 million of cash compensation 70 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 8. Equity Investment The Partnership accounts for its 49 % investment in Sisecam Wyoming using the equity method of accounting. Activity related to this investment is as follows: For the Year Ended December 31, (In thousands) 2024 2023 2022 Balance at beginning of period $ 276,549 $ 306,470 $ 276,004 Income allocation to NRP’s equity interests (1) 22,800 78,179 64,712 Amortization of basis difference ( 4,665 ) ( 4,783 ) ( 4,917 ) Other comprehensive income (loss) 1,452 ( 21,839 ) 15,506 Distributions ( 38,781 ) ( 81,478 ) ( 44,835 ) Balance at end of period $ 257,355 $ 276,549 $ 306,470 ( 1 ) Amounts reclassified into income out of accumulated other comprehensive loss was $ 6.0 million, $( 17.9 ) million and $( 6.8 ) million for the year ended December 31, 2024, 2023 and 2022 , respectively. The difference between the amount at which the investment in Sisecam Wyoming is carried and the amount of underlying equity in Sisecam Wyoming's net assets was $ 111.9 million and $ 116.6 million as of December 31, 2024 and 2023 , respectively. This excess basis relates to property, plant and equipment and right to mine assets. The excess basis difference that relates to property, plant and equipment is being amortized into income using the straight-line method over 27 years. The excess basis difference that relates to right to mine assets is being amortized into income using the units of production method. The following table represents summarized financial information for Sisecam Wyoming as derived from their respective financial statements for the years ended December 31, 2024, 2023 and 2022 : For the Year Ended December 31, (In thousands) 2024 2023 2022 Net sales $ 578,106 $ 773,590 $ 720,120 Gross profit 76,820 187,929 162,575 Net income 46,530 159,549 132,065 The financial position of Sisecam Wyoming is summarized as follows: December 31, (In thousands) 2024 2023 Current assets $ 247,937 $ 253,754 Noncurrent assets 277,471 284,131 Current liabilities 78,135 91,853 Noncurrent liabilities 150,428 119,533 71 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 9. Mineral Rights, Net The Partnership’s mineral rights consist of the following: December 31, 2024 2023 (In thousands) Carrying Value Accumulated Depletion Net Book Value Carrying Value Accumulated Depletion Net Book Value Coal properties $ 660,961 $ ( 299,404 ) $ 361,557 $ 661,256 $ ( 285,470 ) $ 375,786 Aggregates properties 8,655 ( 4,065 ) 4,590 8,655 ( 3,761 ) 4,894 Oil and gas royalty properties 12,354 ( 10,394 ) 1,960 12,354 ( 10,082 ) 2,272 Other 13,143 ( 1,612 ) 11,531 13,143 ( 1,612 ) 11,531 Total mineral rights, net $ 695,113 $ ( 315,475 ) $ 379,638 $ 695,408 $ ( 300,925 ) $ 394,483 Depletion expense related to the Partnership’s mineral rights is included in depreciation, depletion and amortization on its Consolidated Statements of Comprehensive Income and totaled $ 14.8 million, $ 17.3 million and $ 20.9 million for the year ended December 31, 2024, 2023 and 2022 , respectively. During the year ended December 31, 2024, the Partnership recorded a gain $ 4.8 million, included in gain on asset sales and disposals on the Consolidated Statements of Comprehensive Income primarily related to a coal property condemnation in the second quarter of 2024. During the years ended December 31, 2023 and 2022, the Partnership had $ 3.0 million and $ 1.1 million, respectively, included in gains on asset sales and disposals on the Consolidated Statements of Comprehensive Income. Impairment of Mineral Rights During the years ended December 31, 2024, 2023 and 2022 , the Partnership identified facts and circumstances that indicated that the carrying value of certain of its mineral rights exceed future cash flows from those assets and recorded non-cash impairment expense included in asset impairments on the Consolidated Statements of Comprehensive Income as follows: For the Year Ended December 31, (In thousands) 2024 2023 2022 Coal properties (1) $ 87 $ 556 $ 4,365 Aggregates properties — — 92 Total $ 87 $ 556 $ 4,457 ( 1 ) The Partnership recorded $ 0.1 million and $ 0.6 million of impairment expense during the year ended December 31, 2024 and 2023, respectively. The Partnership recorded $ 4.4 million of impairment expense during the year ended December 31, 2022 primarily related to assets whose undiscounted future net cash flows were less than their net book values. Of this amount, $ 2.6 million of impairment expense related to an asset with $ 4.3 million of net book value, resulting in a fair value of $ 1.7 million at December 31, 2022. The fair value of the impaired asset at December 31, 2022 was calculated using a discount rate of 15 %. NRP compared the net book value of its mineral rights to estimated undiscounted future net cash flows. If the net book value exceeded the undiscounted future cash flows, the Partnership recorded an impairment for the excess of the net book value over fair value. A discounted cash flow model was used to estimate the level 3 fair value. Significant inputs used to determine fair value include estimates of future cash flows from coal sales and minimum payments, discount rate and useful economic life. Estimated cash flows are the product of a process that began with current realized pricing as of the measurement date and included an adjustment for risk related to the future realization of cash flows. The impairment recorded during the year ended December 31, 2022 was based on the estimated fair value of the assets versus its net book value and is a level 3 non-recurring fair value estimate. 72 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 10. Intangible Assets, Net The Partnership's intangible assets consist of above-market coal royalty and related transportation contracts with subsidiaries of Foresight Energy Resources LLC ("Foresight") pursuant to which the Partnership receives royalty payments for coal sales and throughput fees for the transportation and processing of coal. The Partnership's intangible assets included on its Consolidated Balance Sheets are as follows: December 31, (In thousands) 2024 2023 Intangible assets at cost $ 51,353 $ 51,353 Less: accumulated amortization ( 38,429 ) ( 37,671 ) Total intangible assets, net $ 12,924 $ 13,682 Amortization expense included in depreciation, depletion and amortization on the Partnership's Consolidated Statements of Comprehensive Income was $ 0.8 million, $ 1.0 million and $ 1.4 million for the year ended December 31, 2024, 2023 and 2022 , respectively. The estimates of amortization expense for the years ended December 31, as indicated below, are based on current lessee mining plans and are subject to revision as those plans change in future periods. (In thousands) Estimated Amortization Expense 2025 $ 792 2026 691 2027 1,008 2028 720 2029 480 11. Debt, Net The Partnership's debt consists of the following: December 31, (In thousands) 2024 2023 Opco Credit Facility $ 113,684 $ 95,834 Opco Senior Notes 5.82 % with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024 $ — $ 12,685 8.92 % with semi-annual interest payments in March and September, with annual principal payments in March, due March 2024 — 4,012 5.03 % with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026 22,841 34,262 5.18 % with semi-annual interest payments in June and December, with annual principal payments in December, due December 2026 5,822 8,732 Total Opco Senior Notes $ 28,663 $ 59,691 Total debt at face value $ 142,347 $ 155,525 Net unamortized debt issuance costs ( 279 ) ( 467 ) Total debt, net $ 142,068 $ 155,058 Less: current portion of long-term debt ( 14,192 ) ( 30,785 ) Total long-term debt, net $ 127,876 $ 124,273 NRP LP Debt 2025 Senior Notes In 2022, NRP redeemed all $ 300 million of its 9.125 % senior notes due 2025 ( "2025 Senior Notes"). Included in loss on extinguishment of debt on the Partnership's Consolidated Statements of Comprehensive Income for the year ended December 31, 2022, are $ 7.2 million of call premium and fees and the write off of $ 3.1 million of debt issuance costs related to the redemption of the 2025 Senior Notes. The cash paid for call premiums and fees is included in other items, net under cash used in financing activities on the Consolidated Statements of Cash Flows. 73 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED Opco Debt All of Opco’s debt is guaranteed by its wholly owned subsidiaries and is secured by certain of the assets of Opco and its wholly owned subsidiaries, other than BRP LLC and NRP Trona LLC. As of December 31, 2024 and 2023 , Opco was in compliance with the terms of the financial covenants contained in its debt agreements. Opco Credit Facility In May 2023, the Partnership entered into the Sixth Amendment (the "Sixth Amendment") to the Opco Credit Facility (the "Opco Credit Facility"). The Sixth Amendment extended the term of the Opco Credit Facility until August 2027. Lender commitments under the Opco Credit Facility increased from $ 130.0 million to $ 155.0 million, with the ability to expand such commitments to $ 200.0 million with the addition of future commitments. In February 2024, the Partnership exercised its option under the Opco Credit Facility to increase the total aggregate commitment under the Opco Credit Facility twice, initially by $ 30.0 million from $ 155.0 million to $ 185.0 million and subsequently by $ 15.0 million from $ 185.0 million to $ 200.0 million. These increases in the total aggregate commitment were made pursuant to an accordion feature of the Opco Credit Facility. In connection with the initial increase, a new lender joined the lending group with a commitment of $ 30.0 million. In October 2024, NRP entered into the Seventh Amendment to the Opco Credit Facility which extended the maturity from August 2027 to October 2029. The Seventh Amendment also removed reference to the preferred units and warrants, which are no longer outstanding, and includes modifications to Opco's ability to declare and make certain restricted payments. Indebtedness under the Opco Credit Facility bears interest, at Opco's option, at: • the higher of (i) the prime rate as announced by the agent bank; (ii) the federal funds rate plus 0.50%; or (iii) SOFR plus 1 %, in each case plus an applicable margin ranging from 2.50 % to 3.50%; or • a rate equal to SOFR plus an applicable margin ranging from 3.50 % to 4.50 %. During the year ended December 31, 2023 , the Partnership borrowed $ 248.8 million and repaid $ 223.0 million, resulting in $ 95.8 million in borrowings outstanding and $ 59.2 of available borrowing capacity under the Opco Credit Facility as of December 31, 2023 . During the year ended December 31, 2024 the Partnership borrowed $ 167.9 million and repaid $ 150.0 million, resulting in $ 113.7 million in borrowings outstanding and $ 86.3 million of available borrowing capacity under the Opco Credit Facility as of December 31, 2024 . The weighted average interest rate for the borrowings outstanding under the Opco Credit Facility for the year ended December 31, 2024 and 2023 was 8.77 % and 8.70 %, respectively. Opco will incur a commitment fee on the unused portion of the revolving credit facility at a rate of 0.50 % per annum. Opco may prepay all amounts outstanding under the Opco Credit Facility at any time without penalty. The Opco Credit Facility contains financial covenants requiring Opco to maintain: • A leverage ratio of consolidated indebtedness to EBITDDA (as defined in the Opco Credit Facility) not to exceed 3.0x. As of December 31, 2024, this ratio was 0.6x; and • an interest coverage ratio of consolidated EBITDDA to consolidated interest expense and consolidated lease expense (in each case as defined in the Opco Credit Facility) of not less than 3.5 to 1.0. As of December 31, 2024, this ratio was 14.7x. The Opco Credit Facility contains certain additional customary negative covenants that, among other items, restrict Opco’s ability to incur additional debt, grant liens on its assets, make investments, sell assets and engage in business combinations. Included in the investment covenant are restrictions upon Opco’s ability to acquire assets where Opco does not maintain certain levels of liquidity. In addition, Opco is required to use 75 % of the net cash proceeds of certain non-ordinary course asset sales to repay the Opco Credit Facility (without any corresponding commitment reduction) and use the remaining 25 % of the net cash proceeds to offer to repay its Senior Notes on a pro-rata basis, as described below under “—Opco Senior Notes.” The Opco Credit Facility also contains customary events of default, including cross-defaults under Opco’s Senior Notes. The Opco Credit Facility is collateralized and secured by liens on certain of Opco’s assets with carrying values o f $ 302.8 million and $ 316.3 million classified as mineral rights, net and other long-term assets, net and $ 23.5 million and $ 26.3 million classified as long-term contract receivable, net on the Partnership’s Consolidated Balance Sheets as of December 31, 2024 and 2023 , respectively. The collateral includes ( 1 ) the equity interests in all of Opco’s wholly owned subsidiaries, other than BRP LLC and NRP Trona LLC (which owns a 49 % non-controlling equity interest in Sisecam Wyoming), ( 2 ) the personal property and fixtures owned by Opco’s wholly owned subsidiaries, other than BRP LLC and NRP Trona LLC, ( 3 ) Opco’s material coal royalty revenue producing properties, and ( 4 ) certain of Opco’s coal-related infrastructure assets, including its long-term contract receivable as described in Note 17. Financing Transaction . 74 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED Opco Senior Notes Opco has issued several series of private placement senior notes (the "Opco Senior Notes") with various interest rates and principal due dates. As of December 31, 2024, only the 5.03% and 5.18% Opco Senior Notes, both due December 31, 2026, remain outstanding. These Opco Senior Notes have principal due annually in December and interest due semi-annually in June and December. As of December 31, 2024 and 2023 , the Opco Senior Notes had cumulative principal balances of $ 28.7 million and $ 59.7 million, respectively. Opco made mandatory principal payments on the Opco Senior Notes of $ 31.0 , $ 39.4 and $ 39.4 million during the year ended December 31, 2024, 2023 and 2022 , respectively. The Note Purchase Agreements relating to the Opco Senior Notes contain covenants requiring Opco to: • maintain a ratio of consolidated indebtedness to consolidated EBITDDA (as defined in the note purchase agreement) of no more than 4.0 to 1.0 for the four most recent quarters; • not permit debt secured by certain liens and debt of subsidiaries to exceed 10 % of consolidated net tangible assets (as defined in the note purchase agreement); and • maintain the ratio of consolidated EBITDDA (as defined in the note purchase agreement) to consolidated fixed charges (consisting of consolidated interest expense and consolidated operating lease expense) at not less than 3.5 to 1.0. In addition, the Note Purchase Agreements include a covenant that provides that, in the event Opco or any of its subsidiaries is subject to any additional or more restrictive covenants under the agreements governing its material indebtedness (including the Opco Credit Facility and all renewals, amendments or restatements thereof), such covenants shall be deemed to be incorporated by reference in the Note Purchase Agreements and the holders of the Notes shall receive the benefit of such additional or more restrictive covenants to the same extent as the lenders under such material indebtedness agreement. In September 2016, Opco amended the Opco Senior Notes. Under this amendment, Opco agreed to use certain asset sale proceeds to make mandatory prepayment offers to the holders of the Opco Senior Notes using an amount of net cash proceeds from certain asset sales that will be calculated pro-rata based on the amount of Opco Senior Notes then outstanding compared to the other total Opco senior debt outstanding that is being prepaid. The mandatory prepayment offers described above will be made pro-rata across each series of outstanding Opco Senior Notes and will not require any make-whole payment by Opco. In addition, the remaining principal and interest payments on the Opco Senior Notes will be adjusted accordingly based on the amount of Opco Senior Notes actually prepaid. The prepayments do not affect the maturity dates of any series of the Opco Senior Notes. Consolidated Principal Payments The consolidated principal payments due are set forth below: (In thousands) Opco Senior Notes Opco Credit Facility Total 2025 $ 14,332 $ — $ 14,332 2026 14,331 — 14,331 2027 — — — 2028 — — — 2029 — 113,684 113,684 Thereafter — — — $ 28,663 $ 113,684 $ 142,347 75 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 12. Fair Value Measurements Fair Value of Financial Assets and Liabilities The Partnership’s financial assets and liabilities consist of cash and cash equivalents, a contract receivable and debt. The carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents approximate fair value due to their short-term nature. The Partnership uses available market data and valuation methodologies to estimate the fair value of its debt and contract receivable. The following table shows the carrying value and estimated fair value of the Partnership's debt and contract receivable: December 31, 2024 2023 Carrying Estimated Carrying Estimated (In thousands) Fair Value Hierarchy Level Value Fair Value Value Fair Value Debt: Opco Senior Notes (1) 3 $ 28,384 $ 27,498 $ 59,224 $ 56,533 Opco Credit Facility (2) 3 113,684 113,684 95,834 95,384 Assets: Contract receivable, net (current and long-term) (3) 3 $ 26,321 $ 22,776 $ 28,946 $ 24,492 ( 1 ) The fair value of the Opco Senior Notes was estimated by management utilizing the present value replacement method incorporating the interest rate of the Opco Credit Facility. ( 2 ) The fair value of the Opco Credit Facility approximates the outstanding borrowing amount because the interest rates are variable and reflective of market rates and the terms of the credit facility allow the Partnership to repay this debt at any time without penalty. ( 3 ) The fair value of the Partnership's contract receivable was determined based on the present value of future cash flow projections related to the underlying asset at a discount rate of 15 % at December 31, 2024 and 2023 . NRP had embedded derivatives in the preferred units related to certain conversion options, redemption features and the change of control provision that were accounted for separately from the preferred units as assets and liabilities at fair value on the Partnership's Consolidated Balance Sheets. Level 3 valuation of the embedded derivatives were based on numerous factors including the likelihood of the event occurring. The embedded derivatives were revalued quarterly and changes in their fair value would have been recorded in other expenses, net on the Partnership's Consolidated Statements of Comprehensive Income. The embedded derivatives had zero value as of December 31, 2023. As a result of the redemption of the Partnership's remaining preferred units in September 2024, NRP no longer has embedded derivatives associated with the preferred units as of December 31, 2024. Fair Value of Non-Financial Assets The Partnership discloses or recognizes its non-financial assets, such as impairments of coal and aggregates properties at fair value on a nonrecurring basis. Refer to Note 9. Mineral Rights, Net for additional disclosures related to the fair value associated with the impaired assets. 76 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 13. Related Party Transactions Affiliates of our General Partner The Partnership’s general partner does not receive any management fee or other compensation for its management of NRP. However, in accordance with the partnership agreement, the general partner and its affiliates are reimbursed for services provided to the Partnership and for expenses incurred on the Partnership’s behalf. Employees of Quintana Minerals Corporation ("QMC") and Western Pocahontas Properties Limited Partnership ("WPPLP"), affiliates of the Partnership, provide their services to manage the Partnership's business. QMC and WPPLP charge the Partnership the portion of their employee salary and benefits costs related to their employee services provided to NRP. These QMC and WPPLP employee management service costs are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income. NRP also reimburses overhead costs incurred by its affiliates, and other related parties, to manage the Partnership's business. These overhead costs include certain rent, information technology, administration of employee benefits and other corporate services incurred by or on behalf of the Partnership’s general partner and its affiliates and are presented as operating and maintenance expenses and general and administrative expenses on the Partnership's Consolidated Statements of Comprehensive Income. Related party general and administrative expenses included on the Partnership's Consolidated Statement of Comprehensive Income are as follows: For the Year Ended December 31, (In thousands) 2024 2023 2022 Operating and maintenance expenses $ 7,106 $ 6,747 $ 6,694 General and administrative expenses 5,420 5,408 4,864 The Partnership had accounts payable to related parties of $ 0.6 million on its Consolidated Balance Sheets at both December 31, 2024 and 2023 . The Partnership had other current assets of $ 0.2 million and $0.1 million on its Consolidated Balance Sheets related to a related party prepaid expense at December 31, 2024 and 2023 , respectively. As a result of its office lease with WPPLP, the Partnership had a right-of-use asset and lease liability of $ 3.4 million and $ 3.5 million included in other long-term assets, net and other non-current liabilities , on its Consolidated Balance Sheets at December 31, 2024 and 2023, respectively. During the years ended December 31, 2024, 2023 and 2022 , the Partnership recognized $ 0.1 million, $ 5.1 million and $ 8.5 million in operating and maintenance expenses, respectively, on its Consolidated Statements of Comprehensive Income related to an overriding royalty agreement with WPPLP. At December 31, 2024 the Partnership had $ 0.5 million of other long-term assets, net on its Consolidated Balance Sheets related to a prepaid royalty for this agreement. This amount was zero for the year ended December 31, 2023. 77 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 14. Major Customers Revenues from customers that exceeded 10 percent of total revenues for any of the periods presented below are as follows: For the Year Ended December 31, 2024 2023 2022 (In thousands) Revenues Percent Revenues Percent Revenues Percent Alpha Metallurgical Resources, Inc. (1) $ 67,714 28 % $ 86,118 23 % $ 102,352 26 % Foresight (1) $ 39,178 16 % $ 60,495 16 % $ 65,597 17 % Alabama Kanu Holdings, LLC (1) (2) $ 29,533 12 % $ 34,869 9 % $ 24,596 6 % ( 1 ) Revenues from Alpha Metallurgical Resources, Inc., Foresight and Alabama Kanu Holdings, LLC are included within the Partnership's Mineral Rights segment. ( 2 ) Alabama Kanu Holdings, LLC purchased Hatfield Metallurgical Holdings, LLC in August 2024. 15. Commitments and Contingencies Legal NRP is involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, Partnership management believes these ordinary course matters will not have a material effect on the Partnership’s financial position, liquidity or operations. Environmental Compliance The operations the Partnership’s lessees conduct on its properties, as well as the industrial minerals, aggregates and oil and gas operations in which the Partnership has interests, are subject to federal and state environmental laws and regulations. See " Items 1. and 2. Business and Properties—Regulation and Environmental Matters ." As an owner of surface interests in some properties, the Partnership may be liable for certain environmental conditions occurring on the surface properties. The terms of substantially all of the Partnership’s coal leases require the lessee to comply with all applicable laws and regulations, including environmental laws and regulations. Lessees post reclamation bonds assuring that reclamation will be completed as required by the relevant permit, and substantially all of the leases require the lessee to indemnify the Partnership against, among other things, environmental liabilities. Some of these indemnifications survive the termination of the lease. The Partnership makes regular visits to the mines to ensure compliance with lease terms, but the duty to comply with all regulations rests with the lessees. The Partnership believes that its lessees will be able to comply with existing regulations and does not expect that any lessee’s failure to comply with environmental laws and regulations will have a material impact on the Partnership’s financial condition or results of operations. The Partnership has neither incurred, nor is aware of, any material environmental charges imposed on the Partnership related to its properties for the period ended December 31, 2024 . The Partnership is not associated with any material environmental contamination that may require remediation costs. However, the Partnership’s lessees are required to conduct reclamation work on the properties under lease to them. Because the Partnership is not the permittee of the mines being reclaimed, the Partnership is not responsible for the costs associated with these reclamation operations. As a former owner of the working interests in oil and natural gas operations, the Partnership is responsible for its proportionate share of any losses and liabilities, including environmental liabilities, arising from uninsured and underinsured events during the period it was an owner. 78 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 16. Unit-Based Compensation 2017 Long-Term Incentive Plan In December 2017, the Natural Resource Partners 2017 Long-Term Incentive Plan (the “2017 Plan”) was approved and it became effective in January 2018. The 2017 Plan authorizes a total of 1,600,000 common units that are available for delivery by the Partnership pursuant to awards under the plan. The initial number of common units authorized for issuance pursuant to awards under the plan was 800,000 and in March 2022, an additional 800,000 units were authorized for issuance. The term is 10 years from the date of approval of the Board of Directors or, if earlier, the date the 2017 Plan is terminated by the Board of Directors or the committee appointed by the Board of Directors to administer the 2017 Plan, or the date all available common units available have been delivered. Common units delivered pursuant to the 2017 Plan will consist, in whole or part, of (i) common units acquired in the open market, (ii) common units acquired from the Partnership (including newly issued units), any of our affiliates or any other person or (iii) any combination of the foregoing. Employees, consultants and non-employee directors of the Partnership, the general partner, GP LLC and their affiliates are generally eligible to receive awards under the 2017 Plan. The 2017 Plan provides for the issuance of a variety of equity-based grants, including grants of (i) options, (ii) unit appreciation rights, (iii) restricted units, (iv) phantom units, (v) cash awards, (vi) performance awards, (vii) distribution equivalent rights, and (viii) other unit-based awards. The plan is administered by the Compensation, Nominating and Governance Committee ("CNG Committee") of the Board of Directors, which determines the terms and conditions of awards granted under the 2017 Plan. The Partnership recognizes forfeitures for any awards issued under this plan as they occur. Unit-Based Awards Unit-based awards under the 2017 Plan are generally issued to certain employees and non-employee directors of the Partnership. Awards granted to employees either vest 3 years following the grant date or vest ratably over the 3 year period following the grant date. Awards granted to non-employee directors vest over a 1 year period. Directors are given the option to take immediate issuance of the vested awards or defer such issuance until a later date. Upon deferral of issuance, such units will continue to accumulate distribution equivalent rights ("DERs") until issuance. In connection with the phantom unit awards, the CNG Committee also granted tandem DERs, which entitle the holders to receive distributions equal to the distributions paid on the Partnership’s common units between the date the units are granted and the settlement date. The DERs are payable in cash upon vesting but may be subject to forfeiture if the grantee ceases employment prior to vesting. During the years ended December 31, 2024 and 2023, the Partnership granted service, performance and market-based awards under its 2017 Plan and during the year ended December 31, 2022, the Partnership granted service-based awards. The Partnership's service and performance-based awards are valued using the closing price of NRP's common units as of the grant date while the Partnership's market-based awards are valued using a Monte Carlo simulation. The grant date fair value of the awards granted during the year ended December 31, 2024, 2023 and 2022 was $ 6.7 million, $ 16.0 million and $ 7.9 million, respectively. Included in these amounts is the grant-date fair value for the market-based awards valued using a Monte Carlo simulation of $ 2.5 million and $ 2.8 million for the year ended December 31, 2024 and 2023, respectively. Total unit-based compensation expense associated with these awards was $ 11.3 million, $ 10.9 million and $ 5.8 million for the year ended December 31, 2024, 2023 and 2022 , respectively, and is included in general and administrative expenses and operating and maintenance expenses on the Partnership's Consolidated Statements of Comprehensive Income. The unamortized cost associated with unvested outstanding awards as of December 31, 2024 was $ 9.5 million, which will be recognized over a weighted average period of 1.5 years. The unamortized cost associated with unvested outstanding awards as of December 31, 2023 was $ 13.3 million. The Partnership paid $ 6.4 million, $ 3.2 million and $ 2.9 million in cash during the year ended December 31, 2024, 2023 and 2022, respectively, for taxes on the unit-based award settlements during the respective years. These cash payments are included in other items, net under cash flows from financing activities on the Partnership's Consolidated Statements of Cash Flows. A summary of the unit activity in the outstanding grants during 2024 is as follows: (In thousands) Common Units Weighted Average Grant Date Fair value per Common Unit Outstanding grants at January 1, 2024 483 $ 46.21 Granted 65 $ 103.50 Fully vested and issued ( 197 ) $ 38.76 Forfeitures ( 1 ) $ 90.70 Outstanding at December 31, 2024 350 $ 60.81 79 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 17. Financing Transaction The Partnership owns rail loadout and associated infrastructure at the Sugar Camp mine in the Illinois Basin operated by a subsidiary of Foresight. The infrastructure at the Sugar Camp mine is leased to a subsidiary of Foresight and is accounted for as a financing transaction (the "Sugar Camp lease"). The Sugar Camp lease expires in 2032 with renewal options for up to 80 additional years. Minimum payments are $ 5.0 million per year through the end of the lease term. The Partnership is also entitled to variable payments in the form of throughput fees determined based on the amount of coal transported and processed utilizing the Partnership's assets. In the event the Sugar Camp lease is renewed beyond 2032, payments become a fixed $ 10 thousand per year for the remainder of the renewed term. 18. Credit Losses The Partnership is exposed to credit losses through the collection of its trade receivables resulting from contracts with customers and a long-term receivable resulting from a financing transaction with a customer. The Partnership records an allowance for current expected credit losses on these receivables based on the loss-rate method. NRP assessed the likelihood of collection of its receivables utilizing historical loss rates, current market conditions, industry and macroeconomic factors, reasonable and supportable forecasts and facts or circumstances of individual customers and properties. Examples of these facts or circumstances include, but are not limited to, contract disputes or renegotiations with the customer and evaluation of short and long-term economic viability of the contracted property. For its long-term contract receivable, management reverts to the historical loss experience immediately after the reasonable and supportable forecast period ends. As of December 31, 2024 and 2023 , NRP had the following current expected credit loss (“CECL”) allowance related to its receivables and long-term contract receivable: December 31, 2024 2023 (In thousands) Gross CECL Allowance Net Gross CECL Allowance Net Receivables $ 37,270 $ ( 4,425 ) $ 32,845 $ 47,170 $ ( 5,655 ) $ 41,515 Long-term contract receivable 24,323 ( 843 ) 23,480 27,265 ( 944 ) 26,321 Total $ 61,593 $ ( 5,268 ) $ 56,325 $ 74,435 $ ( 6,599 ) $ 67,836 NRP reversed $ 1.3 million and charged $ 1.1 million and $ 1.1 million in operating and maintenance expenses on its Consolidated Statements of Comprehensive Income related to the change in the CECL allowance during the year ended December 31, 2024, 2023 and 2022 , respectively. NRP has procedures in place to monitor its ongoing credit exposure through timely review of counterparty balances against contract terms and due dates, account and financing receivable reconciliations, bankruptcy monitoring, lessee audits and dispute resolution. The Partnership may employ legal counsel or collection specialists to pursue recovery of defaulted receivables. 80 Table of Contents NATURAL RESOURCE PARTNERS L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED 19. Leases As of December 31, 2024 , the Partnership had two operating leases for office buildings. On January 1, 2019, the Partnership entered into a new lease for the West Virginia office building owned by WPPLP with a five -year base term and five additional five -year renewal options. Upon lease commencement and as of December 31, 2024 and 2023 , the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheets using the present value of the future lease payments over 30 years. On January 1, 2023, the Partnership entered into a new lease for an office building in Houston with an 11.4 year initial term and two additional five -year renewal options. Upon lease commencement and as of December 31, 2024 and 2023, the Partnership was reasonably certain to exercise all renewal options included in the lease and capitalized the right-of-use asset and corresponding lease liability on its Consolidated Balance Sheets using the present value of the future lease payments over 21.4 years. The Partnership's right-of-use asset included within other long-term assets, net on its Consolidated Balance Sheets totaled $ 4.2 million and $ 4.3 million at December 31, 2024 and 2023 , respectively. The Partnership's lease liability included in other non-current liabilities on its Consolidated Balance Sheets totaled $ 4.4 million and $ 4.3 million at December 31, 2024 and 2023, respectively. During the years ended December 31, 2024, 2023 and 2022 , the Partnership incurred total operating lease expenses of $ 0.6 million, $ 0.6 million and $ 0.5 million included in both operating and maintenance expenses and general and administrative expenses on its Consolidated Statements of Comprehensive Income. The following table details the maturity analysis of the Partnership's operating lease liability and reconciles the undiscounted cash flows to the operating lease liability included on its Consolidated Balance Sheet: Remaining Annual Lease Payments (In thousands) December 31, 2024 2025 $ 601 2026 604 2027 607 2028 611 2029 614 After 2029 11,425 Total lease payments (1) $ 14,462 Less: present value adjustment (2) ( 10,095 ) Total operating lease liability $ 4,367 ( 1 ) The remaining lease terms of the Partnership's two operating leases are 24 years and 19.4 years. ( 2 ) The present value of the operating lease liability on the Partnership's Consolidated Balance Sheets was calculated using a 13.5 % discount rate on the 30 -year lease and a 13.4 % discount rate on the 21.4 -year lease. These rates represent the Partnership's estimated incremental borrowing rates under its two operating leases. As the Partnership's leases do not provide an implicit rate, the Partnership estimated the incremental borrowing rates at the time the leases were entered into by utilizing the rate of the Partnership's secured debt and adjusting it for factors that reflect the profile of borrowing over the 30 -year and 21.4 -year expected lease terms, respectively. 81 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.